International Business Ethics
As governments, private institutions, corporations, and citizens begin to understand the importance of moral considerations and respectable production practices; business ethics is increasingly gaining prominence and becoming the quote of the day (Boylan 39). The 21st-century business performance is zeroing down to instances of bribery, money laundering, corrupt activities, and favoritism in recruitments processes as well as taking much concentration on insider trading effects (Boylan 39).
The concerns governments and global business communities have attached to such vises have resulted in strict regulations that provide a plan for proper corporate governance (Bunnin and Tsui-James 121). In a variety of cases, we realize that the changes in business behaviors especially among producers are linked to social motivations and the general ethical standards of society. In this argument, every UN summit stresses the importance of the global business community encouraging or upholding the best ethical practices both at production levels and at consumption stages (Bunnin and Tsui-James 121). The merged interests of producers and consumers have made the formulation of cross-cultural business values and operational standards inevitable since as consumers’ demands increase each day, multinational corporations and small businesses become canning and mostly incorporate production processes that do not match international standards (Boylan 41). The need to regulate every industrial process by setting principles and standards becomes clearer when we shift our attention to issues of globalization and taste variance.
The only way to confront issues of product mimicking, poor branding, unregulated product pricing, and market shocks is by taking a close examination of global business trends in light of the advantages and disadvantages of business ethics. This could come in terms of the identified opportunities as well as threats imposed to organizations, companies, and small businesses operating in international markets (Boylan 43). While considering the positive impacts that outweigh the negative consequences of international trade relations, businesses must re-evaluate their production cultures and make them conform to global standards. Therefore, this case study is built on the impact of international relations on business ethics and consequently how international business regulations affect industrial performance levels.
Business ethics are a set of conducts within an area of profession examining moral issues that may occur within a business environment (Bunnin and Tsui-James 124). Business ethics as an aspect of moral conduct applies to all forms of business conduct and must be relevant to organization production requirements. The main objective of formulating such operational principles is to ensure that each category of stakeholders in a particular organization or company exhibits those behaviors that are core to improving the general business environment (Zimmerli, Klaus, and Markus 47). In such a case, the approaches attached to ethical business requirements could either be normative or descriptive in nature depending on what an organization, a company or a corporation defines as important for improved performances (Zimmerli, Klaus and Markus 49).
Under the normative approach, business ethics is considered a corporate practice or an area of specialization. The basic argument in connection to this approach is that one acquires the required business code of conduct through learning and professional experiences (Boylan 43). On the other hand, business ethics becomes descriptive if the codes of conduct are embedded within the business culture and every employee or stakeholder must learn the business requirements as part of his or her daily relations. A person is compelled to learn through practice and must conform to specific regulations that are only short-term and become obsolete at the termination of the contract.
In all the approaches given, ethical issues regulate industrial concerns for profit maximization and non-economic trends in various business environments (Lawrence 70). High levels of competition observed in different market segments are due to improved relationships between employers, employees, investors, and consumers. Today, governments have important roles to play in monitoring the action plan of a business (Bunnin and Tsui-James 125). Through laws and regulations, governments are in a position to point out business behaviors that are extraneous and contrary to perceived economic requirements (Lawrence 70). In other words, the rules formulated by the government will only act as guidelines of what is expected of businesses. However, in the majority of cases, certain business behaviors go beyond the control of the government or strict rules of a particular authority. In such a case, the ethical behavior of a firm implicitly takes control and ensures that the response employees and managers give to performance do not hurt consumers or another category of stakeholders who could be investors, the surrounding community, or particular governments (Lawrence 74).
International relation is a wide field that identifies processes that lead to the formulation of rules, policies, and programs that merges various nations, states, organizations, and agencies to work as one entity with a common objective. The legal framework within which international relations are operated is well defined and depends on the binding factors or objected roles. For example in the field of business, the rules formulated allow for peaceful business operations, providing a well-balanced trading environment and ensuring equity in wealth distributions among nations. The history of international relations began with the formation of treaties to enhance trans-national business operations under common terms. The terms of the agreement could be to use a common currency to conduct transactions, allow free trade in goods and services across international borders, or facilitate industrial specialization between nations with an aim of boosting production in particular areas.
Business relations are considered significant in the 21st Century following the urgent needs of globalization. Consumers’ demands have increased forcing companies to diversify in their production in order to meet international standards (Disclosure of the Impact of Corporations on Society 90). The challenge brought about by globalization is that companies have formed a culture of increased activities as a strategy to outmatch their rivals within the same industries. In such an environment, small businesses tend to suffer from huge losses and may at times face-off from the market.
Proper analysis of the business environment in terms of opportunities and uncertainties is variedly applied by the industrial sectors irrespective of country of origin or purpose of operation (Zimmerli, Klaus and Markus 50). On this view, businesses are equally driven by the desire to improve in their areas of operation and make huge returns in every kind of product or service released to different markets. According to studies conducted concerning conditions under which businesses formulated production policies, the cultural practices of businesses are regulated by common goals of profit maximization. This case allows governments, policymakers, organizations, and companies in different geographical locations to merge and formulate rules that will govern their operations (Disclosure of the Impact of Corporations on Society 92).
The way businesses and companies across different nations relate within a prescribed international market signifies important aspects of mutually formulated work relationships. The integration process is only complete if the concerned parties or companies have a common interest that is positively driven. Under such circumstances, businesses struggle to make rules that govern their relationships while ensuring that the benefits are evenly distributed (Zimmerli, Klaus, and Markus 49).
Ethics in global business operation
Just as mentioned, we realize that production approaches taken by businesses lean towards fulfilling global requirements. In other words, the environment within which businesses operate is global in nature and considers taste fulfillment as the basic goal (Yu 44). As observed in the recent past, even small businesses objectively incorporate global aspects in their everyday operations with very little deviations in structure and organization. Even though businesses start their operations from home countries, the production approach is always elliptical and relative to re-location and establishment in other countries. Companies that have become successful in their operations within their home countries would want to identify opportunities in other countries, establish a production base within those countries and supply the entire world with their products (Zimmerli, Klaus and Markus 50). While taking such an adventure, there is a need for such companies to understand the cultural diversities and social differences that exist between their home countries and host nations. This becomes the foundation for any successful operation or failure to reach the production targets.
The definition of culture is embedded in ethics as applied in daily business operations and these aspects tend to differ from country to country (Zimmerli, Klaus and Markus 50). According to various researches conducted on business ethics and culture, every nation, country or state has its own regulations, and therefore, the legal business environments changes as one moves from one country to another (Zimmerli, Klaus and Markus 50). However, the creation of a trade bloc that aims at establishing regional balance enhances production processes through setting common terms of trade and common rules that are easy to adopt. Today companies find it very easy since most business-related courses focus on the normative approach to the ethical business environment, which is common to all companies, countries, and organizations.
As far as production is concerned, firms are required to provide equal employment opportunities irrespective of gender, culture, race, or political affiliation. The UN summit of 2013 stressed issues of regional balance in areas of employment touching on employment regulations and human resource practices. This area regulates individual interest since a company or a business must perform recruitment based on skills, profession, and experience and not on formulated relations. Similarly, managers must respond to employees’ demands that may include good compensations, improved social welfare, a healthy and secure business environment, skill update, promotion of talents and innovations as well as creating room for more employment. According to international standards, a company or a business is evaluated based on the performance relationship between managers and employees and the contribution such a company makes to the community in terms of job opportunities.
Important discussions today revolve around the impact a producing company has on the general environment. The specified remedy requires companies to evaluate their productions in terms of cost and benefit to the community and where the cost outweighs the benefit; the company should either close down or adjust its performance. According to this requirement, companies must always remain responsible for any damage caused through pollution or through any other form of externality (Long 301).
Emerging issues as far as pollution are concerned is that companies should be in a position to compensate the health damage to the society through tax payment. The amount of pollution can be measured based on the quantity of product released or based on the hour the company is actively involved in production. This ensures that companies producing harmful gases like Carbon IV Oxide, Carbon II Oxide, and Nitrogen IV oxide reduce the number of gases released into the atmosphere. According to international requirements, companies should adhere to such regulations and respond promptly by paying the required taxes.
In addition, international regulations enhance the performance levels of companies and other businesses by ensuring that products delivered or services offered to consumers fulfill the taste requirements. It becomes unethical if a company decides to subject consumers to lower-quality goods and services while demanding high pay and high returns. Consumers’ interests in quality goods and services, relatively stable prices, and proper packaging must be met in all circumstances. In various instances, governments and international organizations respond to issues of prices by cutting down corporate taxes or by allowing firms, businesses, and consumers to operate freely across international boundaries (Long 306). This again becomes possible through the formation of s regional trading bloc.
At higher levels, international regulations and policies take into consideration the interest of investors. Companies must respond to the needs of investors by providing a portfolio that is less risky and has higher returns (Homann, Peter, and Christoph 72). This ensures that as much as companies benefit from investors’ funds, their relationship with investors improves, and this will only depend on the gains investors obtain from the initiated production plan. Apart from investors, the interest of different categories of shareholders must also be met (Disclosure of the Impact of Corporations on Society 90). An improved business performance according to production culture should be in a position of reciprocating the efforts of shareholders through higher dividends and profits.
The attached values and codes of conduct in global business operations underlie proper understanding and application of the model of consequentialism in decision-making processes (Disclosure of the Impact of Corporations on Society 92). The consequentialism model of decision-making as used by international regulators corresponds to the areas outlined in the diagram below.
The consequentialism model of ethics in decision making
As outlined in forgoing discussions, national culture is considered an important stage in understanding business ethics and changes in organization behaviors or changes individual’s performance behavior (Homann, Peter and Christoph 73). Whereas national culture is essential in this model, moral development affects the relationship between various groups within an industry or a business premise. This way, any business that aims at traversing into national markets must ensure that the production environment is adjusted to allow for either staff moral development or must respond to national business regulations provided by specific nations or groups of trading partners. In addition, the model of moral development, which is considered sequential proceeds in three stages as defined by international business laws:
The first stage is the pre-conventional stage in which the law recognizes that people or companies are not motivated by societal values or regulations but by personal interests (Disclosure of the Impact of Corporations on Society 92). Therefore, all the activities performed by businesses, governments, and individuals all aim at fulfilling personal objectives. The hiking competition levels among companies as currently observed ethically fits into this model and the little part taken by economic regulators will only reduce the levels of operations among these companies (Russell and John 59).
The second stage is conventional in which companies, businesses, and individuals completely respond to cultural values. The actions taken by producing companies are not merely for self-gains but to ensure that every stakeholder within the line of production benefits from the policies created (Disclosure of the Impact of Corporations on Society 92). Under conventional, moral behaviors of companies conform to global business ethics and retain the characteristics and international codes of conduct. The third stage is the post-conventional where businesses, companies, and organizations will only accept the imposed cultural values on the condition that the values conform to moral foundations (Russell and John 61). On a similar argument, the educational and training stage within the model will facilitate an individual’s ethical progress and behavior development to match the requirements of international standards (Dunning 110). The education approach is an aspect of normative ethical impulsion and helps a business that aims at facilitating its global operations to make decisions that are in line with national requirements.
While formulating conventional business regulations, international bodies must link the interest of individual businesses to communal requirements. Important to note that international bodies are not distinct and cannot operate as single entities in influencing the performance of every company, business, or organization (Homann, Peter and Christoph 79). The decision to have a unifying moral behavior in business must link to the set standards of business owners since their decision to produce or not to produce have a serious impact on global economic performances (Dunning 112). If countries merge and set rules that govern the relationships between producers and consumers, the decision to follow such rules will clearly define the intentions of either party or reasons for taking part in business operations.
The ethical concerns in global business operations include demographic moderators which have an impact on age, work experience, religiosity, and gender (Dunning 112). According to the set international standards, any producing company must ensure that all these areas are considered and included while defining products. On issues of gender in business culture, females possess higher ethical judgment than their male counterparts. Women tend to be interested in issues of business ethics and maintain a good dressing code, become highly courteous while dealing with customers and respond very fast to changes in the business environment. On the other hand, men appear to be sluggish and may not give equal responses as observed with women. This means that any business or company that employs both women and men should recognize the diversities in performance and physical appearance (Homann, Peter and Christoph 79).
The response men and women of equal age give to production also differ across geographical locations and must be considered as an initial stage in establishing a good production relation within a country or in other countries. The same experience is observed in consumption where women seem to consume in bulk that men or the kind of product consumed by men completely differ from those goods or services preferred by men (Russell and John 59). This concerns businesses that design various products to match the taste of both male and female consumers. All these aspects must be considered if a business were to compete favorably in a market that has several companies targeting the same consumers.
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